Question 20N.3.HL.TZ0.a
| Date | November 2020 | Marks available | [Maximum mark: 2] | Reference code | 20N.3.HL.TZ0.a |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Calculate | Question number | a | Adapted from | N/A |
Firm A, which is operating in a perfectly competitive market, produces almonds. Figure 1 illustrates Firm A’s average total cost (ATC), average variable cost (AVC) and marginal cost (MC) curves at different output levels.
Using information from Figure 1, calculate Firm A’s total fixed costs.
[2]
20 (29 − 10)
Any valid working (from another output level e.g. 30 (24.67 − 12)) is sufficient for [1].
= $380
Allow +/− $10 i.e. from $370 to $390.
NB responses that lie outside the +/− $10 tolerance but indicate that, at a given quantity, the AVC and ATC are approximately accurate (eg 45 (31 − 23) = $360) may be fully rewarded.
An answer of $380 or 380 without workings is sufficient for [1].
For full marks to be awarded, the response must provide valid working and include correct units. However, superfluous units (e.g. $380 per kg) may be ignored.
Candidates were generally able to recognize that Q(ATC−AVC)= FC although a significant minority simply subtracted AVC from ATC. Those who selected a quantity of 20kg for the calculation were able to produce an answer of $380. However, candidates who selected an alternative quantity found some difficulty in reading precise figures from the graph. Candidates who performed a calculation based on a reasonable reading from the graph were awarded appropriately.
